“To succeed in 2012, you need to think about how trends in the national economy tie into your local market,” said Clark Toole, president and chief operations officer (COO) of Coldwell Banker Residential Real Estate Inc. in Florida. Speaking on the state’s residential market, Toole said, “Florida is such a diverse state, both geographically and culturally, that you really need to do your homework.”

Toole was one of three expert practitioners who spoke at Florida Realtors® 2012 Real Estate and Economic Forecast Conference in Orlando earlier this week.

Cynthia Shelton, 2009 president of Florida Realtors and a director at Colliers International in Orlando, discussed the commercial market, and Dean Saunders, accredited land consultant and broker-owner of Coldwell Banker Commercial Saunders Real Estate in Lakeland, covered the market for land and undeveloped property.

Toole said that key trends affecting the Florida residential market include strong demand from international buyers, a growing population – 348 people a day net growth in 2010-11 – and an upswing in employment.

Reviewing Florida’s housing market, Toole said that inventories of for-sale homes have fallen to 7.4 months on a statewide average, and just 5.4 months for listings priced under $250,000. He added that lender-owned properties (REOs or “real estate owned”) now constitute about 6 percent of inventory, but 40 percent of sales. Short sales, where the market value of the home is below the mortgage loan value, make up about 31 percent of current inventory and 18 percent of sales.

Toole added that property management and leasing will be an increasingly important segment of the market in 2012, reaching $11 billion or more, due to the large numbers of investor buyers and “dark” multifamily buildings with few owners.

Turning to the state’s commercial markets, Shelton said investors are increasingly interested in buying office, retail and industrial properties. Vacancy rates, while high, have stabilized, along with rental rates. “Core assets (essential to businesses) are selling and lenders – including the life insurance companies – are lending again,” she said.

Shelton added that lenders are getting more realistic regarding the pricing needed to dispose of their distressed commercial properties. “There are great opportunities for Realtors to find owner-users with the funds to purchase buildings they have been renting,” she said.

Looking ahead to 2012, Shelton said she expects more tenants to come into the Florida commercial markets, helping to stabilize conditions. “I think Florida has bright days ahead, as more people seek to own investment real estate in our market.”

Saunders said the state’s land market is also highly diverse, ranging from cropland, pastures and timberland to transitional and infill land located in suburban and urban locations. “Land has both an investment angle and a romantic angle,” he said. “You can own it, walk on it and enjoy it.”

Overall, Florida has about 34.7 million acres of land, with only 3 million acres now developed, he said. Local, state and federal governments own about 10 million acres.

“As real estate professionals, you have to understand how the various types of land are affected by global trends and local market conditions,” Saunders said. “For example, the price of a citrus grove is closely tied to the commodity market, and a lot of investors are now active in that sector on a national level.” However, Florida has seen a 34 percent decrease in its citrus acreage in the last six years, he added.

For the next few years, Saunders expects little demand for transitional land on the edge of the state’s cities. “There is a lot of existing commercial space that needs to be absorbed first,” he said. “There is pent-up demand for residential lots, but when that demand will be released is a big question.”

In the 2012 land market, Saunders said the biggest opportunities are likely to occur in the agricultural sector, as institutional investors purchase productive cropland to diversify their portfolios. “Take a look at alternative energy producers, as well,” he added. “They may be interested in buying acreage to support their biomass energy facilities.”

© 2011 Florida Realtors®

At the recent Florida Realtors’ 2012 Real Estate and Economic Forecast Conference, Chief Economist Dr. John Tuccillo stressed the slow but steady upward trends in Florida housing and employment, both of which have been overlooked. With prices at attractive levels, investors are back in the market and the distressed property market has stabilized. International demand has risen over the last year, adding to the positive trends in Florida real estate. Realtor panelist Clark Toole agreed, citing the increases in population and employment as positive drivers for the state’s economy.

In Florida and nationwide, restrictions on credit have slowed the real estate market’s recovery. While the average credit scores of approved loans under “normal” circumstances are around 720, in 2009 and 2010 the average was around 760. Easing credit conditions to “normal” could increase sales 15-20% higher. Dr. Lawrence Yun, NAR chief economist, shared his belief that there will be a 10% price increase in South Florida as bargain hunters and foreign buyers boost sales – taking advantage of prices that are too good to pass up.

Even experts outside the industry agree that Florida should have positive growth in 2012. While Florida employment growth has been weak and its recovery sluggish, Mark Vitner, senior economist at Wells Fargo, also had encouraging remarks on the state. He pinpointed tourism and healthcare as leaders in the employment recovery. International visitors to Florida’s many vacation destinations have boosted tourism, while concurrently stepping up as investors in the state’s housing market. Vitner indicated specific areas in the state where prices have bottomed-out and employment has turned around.

The Florida recovery is a marathon, not a sprint. Although the pace is frustrating at times, this slow and steady improvement is good for Florida. The state is moving in the right direction. Realtors can encourage positive thinking about the real estate market with their clients and back up their case with the facts. The national consumer sentiment number of 67.7 beat last month’s 64.1 and the analysts’ forecast, showcasing that consumers’ attitudes are brighter across the U.S. Consumer sentiment has improved each of the last four months. As perceptions shift to better match reality, sales and your business should change for the better.

– Erica Cross, research analyst, Florida Realtors

Two national studies – one from Realtor.com and one from Trulia – suggest that some Florida markets are poised for a real estate rebound.

“This is a positive trend for Florida,” says John Tuccillo, Florida Realtors chief economist. “While Trulia and Realtor.com aren’t completely accurate in home prices and sales – mainly because they base their numbers on only homes listed on their website – it’s useful to look at visitor behavior and note the trends. If Trulia says more visitors are doing a home search in the Miami market, for example, it probably follows that Miami is experiencing an upswing in demand.”

Realtor.com’s Top Ten Turnaround Report

In Realtor.com’s “Top Ten Turnaround Report,” six Florida cities were considered good bets for an upswing in sales. Realtor.com, which is owned by The National Association of Realtors®, says it created a formula to rank a city’s turnaround potential based on recent price appreciation, changes in inventory, median age of inventory, number of Realtor.com searches by visitors and area unemployment.

Realtor.com attributes the Florida cities’ success to year-over-year home price increases, reductions in inventory, lower unemployment rates and, in some cases, an upswing in international buyers.

Realtor.com’s turnaround list includes:

1. Miami: Ranked No. 1 in the report, Miami hit the top based on “a healthy inventory that is only half the size from a year ago,” a lower foreclosure rate than the national average, and an increase in condo sales.
2.  Orlando: While No. 2, Realtor.com says Orlando had more home searches than any other city when compared to the total number of listings. It also had a significant drop in the number of foreclosures.
3. Fort Myers-Cape Coral: Median prices in Fort Myers-Cape Coral have increased year-over-year, foreclosures are down, inventory is lower and foreign buyers are attracted to the area’s real estate prices.
4. Phoenix-Mesa, Ariz.
5. Fort Lauderdale: Inventory has decreased and prices have increased, says Realtor.com.
6. Sarasota-Bradenton: About one in 10 foreign buyers look in Sarasota-Bradenton for a home, Realtor.com says. Listing prices have increased and inventory has decreased.
7. Lakeland-Winter Haven: According to Realtor.com, the number of distressed sales has decreased significantly and prices have gone up.
8. Boise City, Idaho
9. Fort Wayne, Ind.
10. Ann Arbor, Mich.

Trulia’s Metro Movers Report

Trulia has debuted a new report that analyzed its home searches.

In one study, Trulia looked at the number of people who searched for housing in a city – including renters – and compared it to the number of city residents looking elsewhere for a home. An area with a high number of inbound searches and a low number of outbound searches, Trulia reasons, suggests an increased demand for housing.

According to the study, the North Port-Bradenton-Sarasota area had six times more searches by inbound people than outbound people, landing it in the list’s No. 1 position, but four other Florida cities also made the top 10 list:

1. North Port-Bradenton-Sarasota
2. Riverside-San Bernardino-Ontario, CA
3. Charleston-North Charleston-Summerville, SC
4. Fort Lauderdale-Pompano Beach-Deerfield Beach
5. Cape Coral-Fort Myers
6. West Palm Beach-Boca Raton-Boynton Beach
7. Fort Worth-Arlington, TX
8. Oxnard-Thousand Oaks-Ventura, CA
9. Las Vegas-Paradise, NV
10. Orlando-Kissimmee-Sanford

Trulia also looked at the Chicago and New York City markets to see where residents wanted to move. Three Florida cities ranked in the top 10 for Chicago residents: Tampa-St. Petersburg-Clearwater (No. 4), Cape Coral-Fort Myers (No. 6) and Orlando-Kissimmee-Sanford (No. 10).

In New York City, five Florida cities made the list: Miami-Miami-Beach-Kendall (No. 2), Orlando-Kissimmee-Sanford (No. 3), West Palm Beach-Boca Raton-Boynton Beach (No. 5), Fort Lauderdale-Pompano Beach-Deerfield Beach (No. 6) and Tampa-St. Petersburg-Clearwater (No. 7).

© 2011 Florida Realtors®

Nationwide, the average list price is $320,325, up 2.36 percent year-over-year.

Here are the top 15 cities boasting the highest percentage of year-over-year increases in average list prices.

1. Miami
Average list price: $640,332
Year-over-year increase: 27.4%

2. Fort Myers-Cape Coral, Fla.
Average list price: $443,570
Year-over-year increase: 26.27%

3. Central-Fla. rural service area
Average list price: $405,809
Year-over-year increase: 19.41%

4. Punta Gorda, Fla.
Average list price: $267,066
Year-over-year increase: 16.37%

5. Macon, Ga.
Average list price: $193,520
Year-over-year increase: 15.98%

6. Sarasota-Bradenton, Fla.
Average list price: $466,785
Year-over-year increase: 15.86%

7. Naples, Fla.
Average list price: $713,087
Year-over-year increase: 15.13%

8. West Palm Beach-Boca Raton, Fla.
Average list price: $591,895
Year-over-year increase: 14.68%

9. Ocala, Fla.
Average list price: $193,360
Year-over-year increase: 12.07%

10. Lakeland-Winter Haven, Fla.
Average list price: $181,409
Year-over-year increase: 11.48%

11. Orlando, Fla.
Average list price: $319,419
Year-over-year increase: 10.56%

12. Portland-Vancouver, Ore.-Wash.
Average list price: $314,537
Year-over-year increase: 10.52%

13. Boise City, Idaho
Average list price: $212,588
Year-over-year increase: 10.43%

14. Springfield, Illinois
Average list price: $174,537
Year-over-year increase: 9.12%

15. Shreveport-Bossier City, La.
Average list price: $211,414
Year-over-year increase: 8.34%

Source: Melissa Dittmann Tracey, Realtor® Magazine Daily News

The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate.

The following details apply to the homebuyer tax credit expansion:

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

The www.federalhousingtaxcredit.com site is being updated. Check the site next week for more detailed information on the new tax credit.

For more information, visit www.nahb.org.

But the road to recovery will be uneven. Economists say that an uptick in business spending will lead the way, followed by federal government stimulus projects that will create some jobs. Consumers, unfortunately, are likely to be the last to see good times return, because widespread unemployment – which is now just a notch below 10 percent – won’t start to go down until after the recovery is well under way.

It has been rough, but economists say it’s always that way for Florida.

“It performs better in good times, but during bad times, in recessions, it is one of the worst performing states in the nation,” said Moody’s Economy.com economist Chris Lafakis. “And during times of expansion it is one of the best.”

Some experts say they already see the early signs of such progress.

“The negative numbers just start getting smaller or they stop falling or they fall at a slower rate,” said SunTrust Chief Economist Gregory Miller. It’s like you tumbled out of a boat a while ago and “now we’re at the stage of swimming back to the surface.”

Other economists agree that the worst may be over as soon as this summer. Consumers surely have had enough, judging by the strong jump in Floridians’ consumer confidence this month.

Here’s how economists say the state will find its way out of the slump:

Business-led recovery

Economists say the recovery will begin with an increase in business capital spending, as companies rebuild inventories or upgrade technology or send business travelers back out on the road.

At some South Florida companies, capital spending already has increased and begun to pay off. Last year, Stress Free Corporate Housing, which provides temporary living arrangements for executives, says the audio-visual equipment it installed in its new Weston office is helping to bring in new business.

The firm wanted to hold employee conferences and save on travel expenses. But it also began using the equipment for Webinars – seminars via the Internet – for its clients.

President and Chief Executive Officer Darin Karp said his firm is about to sign a deal with a Fortune 500 company to provide temporary housing for executives from Asia and the Middle East who need to come to Florida for training.

“We’re definitely seeing glimmers of hope off the first quarter and the beginning of this quarter,” Karp said. “We have some big stuff on our plate, and it’s attributed to doing the Webinars.”

Stimulus spending

An increase in government spending is expected in the fourth quarter, as states and cities pump out the $787 billion in federal stimulus money to build roads and other projects. That influx of cash will lead to more jobs, at least in construction.

Even though the stimulus law was enacted in February, government is still crafting detailed plans and regulations for the federal package, so it’s unclear precisely how many millions will be earmarked for Florida.

“We will begin to see some impact of the stimulus legislation in the last quarter of this year,” said economist Antonio Villamil, dean of the School of Business at St. Thomas University.

Confidence rises

Consumer confidence – a measure of how willing people are to spend on big-ticket items – is already rising. The University of Florida consumer confidence survey issued earlier this week showed the index jumped to 71 in April, up from 65 in March, which is close to the low reached during the last recession in 1991.

The importance of the jump is that consumer confidence is a forward-looking economic indicator, one that is often a sign that consumer spending will rise, too.

Employment to lag

Employment rates aren’t expected to rise until recovery of other sectors is under way. Only after growth returns in the overall economy will businesses be comfortable enough to begin to create jobs again. Employment is key to consumers’ recovery. Don’t look for consumer spending to increase until after employment stabilizes, economists say.

“Every business cycle is unique, but they get going in fits and starts,” said economist Manuel Lasaga, president of Strategic Information Analysis in Miami. “This [recovery] will be weaker than normal.” Strong growth, he said, won’t appear until 2010.

And some sectors seem to be hurt so badly, their recovery is not at hand. Surely, housing remains deeply troubled. Manufacturing, too, is waiting for signs of recovery.

“We’re not seeing that [any increase in demand] yet frankly,” said Tom Kennedy, a CPA who is chairman of the South Florida Manufacturers Association. Kennedy is controller of R.L. Schreiber in Pompano Beach, which produces food products for the food service industry. The credit crunch, he said, is making the business environment even more difficult.

When will it end? The economy should begin to pull out of recession around the end of summer, according to several economists. At the latest, look for it early next year, others say.

“We are in the fourth phase of the recession,” said SunTrust’s Miller. That’s the pre-recovery phase, he said. Next is the turnaround.

It’s a little early yet, and the signs are still faint.

“You really have to look long and hard to find any signs of strength in the economy,” said Mark Vitner, Wachovia’s senior economist. “But it’s not so hard to find areas where the economy had been in a free fall and now is just merely declining.”

For those businesses looking forward to the turnaround, they’ve set their sights on year’s end.

“People are getting new budgets for purchasing at the end of the third quarter, the fourth quarter. A lot of lights are coming on,” said Joel Ledlow, chief executive officer of ScheduAll, a Hollywood firm that produces management software systems for broadcasters and media. “People are saying they have cut about as much as they can cut. Now they’re ready for some very strategic investments.”

Reprinted from Sun Sentinel

But Bernanke also said major sectors of the economy remain weak, there will likely be “further sizable job losses,” and the recovery will be slow.

“We continue to expect economic activity to bottom out, then to turn up later this year,” he told the Joint Economic Committee of Congress.

He said he expects unemployment – at 8.5 percent in March – to peak early next year short of 10 percent, but it could stay high for a time.

Some economists have forecast a 10 percent jobless rate.

In February, the Fed chairman predicted a recovery later this year, but on Tuesday, he ticked off fresh signs to back that view. Consumer spending rose 2.2 percent in the first quarter after falling sharply the second half of 2008. And the housing market shows “signs of bottoming,” he said.

While businesses are swiftly liquidating inventories, hurting growth, Bernanke said that clears the way for increased production when demand rebounds. A key index released Tuesday showed service industries shrinking more slowly in April.

Bernanke’s earlier forecast “was much more sketchy,” says Brian Bethune, chief economist at IHS Global Insight.

Bernanke said the economy remains weak. Gross domestic product fell at an annual rate of more than 6 percent the past six months. “A relapse in financial conditions” could stall a recovery, he said.

Financial markets are nervously awaiting results of “stress tests” of 19 large banks.

The results, to be released after stock markets close Thursday, are expected to show whether they have enough capital to withstand a worsening economy.

Banks that need more cash will have six months to raise it before tapping government bailout money. A report from Friedman Billings Ramsey predicts at least 11 banks will need more funds.

Bernanke said many should be able to raise equity or use other means to increase their capital without getting more federal money and that he hopes the program “will restore confidence” in banks.

Some are skeptical. “A lot of people who participated when banks raised capital in the last year know what bad investments they turned out to be,” says Alan Villalon of First American Funds.

Reprinted from USAToday.com

The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest level since November’s 44.7 and well surpasses economists’ expectations for 29.5.

The consumer confidence survey showed a substantial improvement in consumers’ short-term outlook, including even their assessment of the job picture.

Some encouraging news in areas like retail sales and housing have helped fuel a recent stock rally. Earlier Tuesday, a housing index showed that home prices dropped sharply in February, but for the first time in 25 months the decline was not a record – another sign the housing crisis could be bottoming.

Economists closely monitor consumer sentiment because consumer spending accounts for more than two-thirds of economic activity.

Existing home sales rose 30 percent last month with a total of 13,085 homes sold statewide compared to 10,080 homes sold in March 2008, according to FAR. Statewide existing home sales in March were 32.7 percent higher than February’s statewide sales.

Florida Realtors also reported a 25 percent rise in statewide sales of existing condominiums in March, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 37.2 percent over the total units sold in February.

Fifteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in March and 13 MSAs also showed gains in condo sales. It marks the ninth consecutive month that a majority of markets have reported increased sales.

Florida’s median sales price for existing homes last month was $141,300; a year ago, it was $201,700 for a 30 percent decrease. Industry analysts with the National Association of Realtors® (NAR) report there is a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in February 2009 was $164,600, down 15 percent from a year earlier, according to NAR. In California, the statewide median resales price was $247,590 in February; in Massachusetts, it was $252,500; in Maryland, it was $253,200; and in New York, it was $210,000.

NAR’s latest housing industry outlook reported that entry-level buyers are seeking bargains, which resulted in sales of distressed properties accounting for 40 to 45 percent of February’s transactions. “Given the downward distortion in price comparisons due to distressed sales, it’s important for owners to keep in mind that this doesn’t equate to a similar loss of value for traditional homes in good condition,” said NAR Chief Economist Lawrence Yun.

In Florida’s year-to-year comparison for condos, 4,388 units sold statewide compared to 3,503 units in March 2008 for a 25 percent increase. The statewide existing condo median sales price last month was $108,700; in March 2008 it was $172,300 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $172,200 in February 2009.

Interest rates for a 30-year fixed-rate mortgage averaged 5 percent last month, down significantly from the average rate of 5.97 percent in March 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s large to medium-size markets, the Melbourne-Titusville-Palm Bay MSA reported a total of 539 homes sold in March compared to 445 homes a year ago for a 21 percent increase. The existing home median sales price was $123,700; a year ago, it was $159,000 for a 22 percent decrease. In the year-to-year comparison for the existing condo market, a total of 113 units sold in the MSA last month, up 24 percent compared to 91 condos sold the previous March. The market’s existing condo median price was $123,100; a year ago, it was $164,300 for a 25 percent decrease.

Reprinted from the Florida Association of Realtors

Here are a few items for Canadians to consider while shopping for homes or condos in Clearwater / St. Pete:

• Who will take care of our property while we are not in town? It is important to have a local contact for someone you trust in the event the property needs care or maintenance. Many buyers prefer condos because most aspects of the exterior of the condo are maintained by the condo association through their monthly fees.

• What is the best location in Tampa Bay? The best location is a personal preference and must be experienced in person. I don’t recommend buying a home or condo in the Clearwater / St. Petersburg area sight unseen. The quality of life varies from one location to the next. Vacation here or stay a while and get to know the area layout before deciding on a final location. We can help you narrow the choices and find the best deals.

• What are the property taxes? Property taxes are reassessed after the sale of the property. The property taxes are based upon the local millage rate and multiplied by the taxable value of the property. You will not inherit the previous owner’s tax amount. There are 54 taxing entities in Pinellas County, so it is important to consider your tax consequences when purchasing a property in Florida. Starting in 2009, there is a 10% tax increase cap for vacation and rental homes. We can help you estimate your tax amount.

• What about homeowner’s insurance? Homeowner’s insurance is available and can be obtained for vacation and rental homes. We have several vendors available to quote rates when a property has been selected.

• How long can we stay in the US? As a non-citizen, a Canadian can stay in the US for a maximum of 6 months regardless of whether or not they have a residence in the United States. Check with the authorities to make sure this is accurate and up to date.

• Is now a good time to buy? Absolutely, there are more properties on the market than we have seen in years. The heavy competition is pushing real estate prices to new lows and bargains are everywhere.